Why is property insurance yet to take-off in India? - Moneylife Personal Finance site and magazine
Wednesday, June 13, 2012
Friday, June 8, 2012
Thursday, June 7, 2012
Thursday, May 17, 2012
Saturday, February 18, 2012
Bond yields down as debt sale cut-offs cheer
MUMBAI: Indian federal bond yields ended slightly down on Friday, after lower-than-expected cut-off yields at a debt sale prompted some buying.
The 10-year benchmark bond yield ended one basis point down at 8.19 percent. It traded in a narrow 8.18-8.22 percent band during the session.
The RBI set a cut-off yield of 8.20 percent on the 2021 bonds, lower than a Reuters poll forecast of 8.23 percent. The 120-billion-rupee auction was fully sold.
"The cut-off was slightly aggressive on the 10-year bond, and that augured well for the market," said Prasanna Patankar, senior vice-president at STCI Primary Dealer.
Volume was low with total traded amount at 90.85 billion rupees ($1.84 billion) on the central bank's trading platform, sharply lower from 119.65 billion rupees on Wednesday and 186.40 billion rupees on Tuesday.
Post trading hours, the central bank said it bought 98.57 billion rupees of debt, as against 100 billion rupees notified via its open market operation in the secondary market. The RBI said it had bought 9.15 percent, 2024bonds at a cut-off yield of 8.28 percent, higher than 8.25 percent forecast in a Reuters poll.
"In this situation, when liquidity is such a big issue, traders could offload bonds through OMOs (open market operations) and it is encouraging that RBI has bought big chunk of the bonds offered," said a trader with a foreign bank.
Patankar of STCI expects the 10-year bond yield to be in a 8.10-8.25 percent band in the near term, with a cautious undertone likely next week. "Market will wait to see whether RBI will announce OMOs (open market operations) next week as well," Patankar said.
Since November, the RBI has bought about 906 billion rupees of debt through open market purchases. Indian treasury markets are shut on Monday because of a local holiday. The benchmark five-year swap rate was up 5 basis points at 7.32 percent, while the one-year rate settled 2 basis points up at 8.07 percent.
The 10-year benchmark bond yield ended one basis point down at 8.19 percent. It traded in a narrow 8.18-8.22 percent band during the session.
The RBI set a cut-off yield of 8.20 percent on the 2021 bonds, lower than a Reuters poll forecast of 8.23 percent. The 120-billion-rupee auction was fully sold.
"The cut-off was slightly aggressive on the 10-year bond, and that augured well for the market," said Prasanna Patankar, senior vice-president at STCI Primary Dealer.
Volume was low with total traded amount at 90.85 billion rupees ($1.84 billion) on the central bank's trading platform, sharply lower from 119.65 billion rupees on Wednesday and 186.40 billion rupees on Tuesday.
Post trading hours, the central bank said it bought 98.57 billion rupees of debt, as against 100 billion rupees notified via its open market operation in the secondary market. The RBI said it had bought 9.15 percent, 2024bonds at a cut-off yield of 8.28 percent, higher than 8.25 percent forecast in a Reuters poll.
"In this situation, when liquidity is such a big issue, traders could offload bonds through OMOs (open market operations) and it is encouraging that RBI has bought big chunk of the bonds offered," said a trader with a foreign bank.
Patankar of STCI expects the 10-year bond yield to be in a 8.10-8.25 percent band in the near term, with a cautious undertone likely next week. "Market will wait to see whether RBI will announce OMOs (open market operations) next week as well," Patankar said.
Since November, the RBI has bought about 906 billion rupees of debt through open market purchases. Indian treasury markets are shut on Monday because of a local holiday. The benchmark five-year swap rate was up 5 basis points at 7.32 percent, while the one-year rate settled 2 basis points up at 8.07 percent.
Should you add a co-owner to your property?
After three years of marriage, Prakash Mirpuri, a concept visualiser at a digital entertainment company, decided to make his wife Kamya a joint owner of his flat in Pune, last year. Mirpuri believed that it would only take a letter to the housing society to add his wife as co-owner in the share certificate. His misconception was soon dispelled. "The large amount of paperwork, in addition to the substantial cost that it would entail, has made me change my mind," says the 38-year-old. He discovered that he would need permission from various authorities and would have to pay about Rs 80,000 to complete the process.
Adding another owner to your property is a weighty decision, and not just in terms of cost. One of the biggest issues is that once the deed is made, any transaction related to the property would require the consent of the co-owner as well. So, consider carefully before taking this step.
How can I add a co-owner?
A joint owner will, by default, be the owner of half the property, but you can specifically mention the proportion of the ownership between the two individuals. Here are the two ways in which you can make another person a co-owner.
Sale deed: You can sell a portion of the property to the other person and he can use this sale deed to get himself registered as the co-owner of the property by paying the necessary charges. The stamp duty is typically in the range of 5-12.5% of the market value of the property (varies in different states), while the registration charge is about 1%.
How will it benefit me?
Co-owning a property can be beneficial for married couples because if one of the partner dies, the surviving spouse automatically becomes the sole owner of the house. So, the transfer of rights becomes easy.
Another advantage is that if the couple has taken a home loan jointly, each person can avail of the tax benefits. Under Section 24 of the Income Tax Act, both partners can claim deductions of up to Rs 1.5 lakh for the interest paid on the home loan. They can also claim tax benefits of up to Rs 1 lakh for the principal amount under Section 80C.
Adding another owner to your property is a weighty decision, and not just in terms of cost. One of the biggest issues is that once the deed is made, any transaction related to the property would require the consent of the co-owner as well. So, consider carefully before taking this step.
How can I add a co-owner?
A joint owner will, by default, be the owner of half the property, but you can specifically mention the proportion of the ownership between the two individuals. Here are the two ways in which you can make another person a co-owner.
Sale deed: You can sell a portion of the property to the other person and he can use this sale deed to get himself registered as the co-owner of the property by paying the necessary charges. The stamp duty is typically in the range of 5-12.5% of the market value of the property (varies in different states), while the registration charge is about 1%.
Gift deed: You can also share the ownership by gifting it to someone. In this case, you will need to get a gift deed executed on a stamp paper and register it at the registrar's office. A gift to a relative is not taxable. However, if you gift the property to a non-relative, the value of the house is treated as income and taxed according to the income tax rules for the relevant year. The stamp duty is generally 2% of the value of the property, along with 1% registration charge.
 |
How will it benefit me?
Co-owning a property can be beneficial for married couples because if one of the partner dies, the surviving spouse automatically becomes the sole owner of the house. So, the transfer of rights becomes easy.
Another advantage is that if the couple has taken a home loan jointly, each person can avail of the tax benefits. Under Section 24 of the Income Tax Act, both partners can claim deductions of up to Rs 1.5 lakh for the interest paid on the home loan. They can also claim tax benefits of up to Rs 1 lakh for the principal amount under Section 80C.
hat if the house is mortgaged?
Banks generally don't charge any money to just add a co-borrower to the loan. However, if you want to extend this and add the person as a co-owner, the lender might be more selective about letting you do so. The bank or financial institution from which you have taken the loan will probably ask the co-owner to become a co-borrower as well and then it will ascertain his/her credit worthiness. The mortgage deed will have to be redrawn and the new owner will have to pay additional stamp duty and registration charge along with the bank's processing fee.
A senior general manager with the Bank of Indiaexplains that they consult with their legal team before agreeing to add a co-owner to the property. "If it increases the eligibility criteria of the couple and gives them an opportunity to opt for a top-up loan, we certainly consider such a case," he explains.
According to the official, the bank levies all the charges that are levied in case of a new application. "We impose all the necessary charges, including the search and valuation, legal, administrative and processing fees, on the customer," he adds.
However, a bank will not let you add a co-owner if you only want to take advantage of a new scheme floated by it. "For instance, if there is a scheme under which we are offering a waiver of certain charges, we don't include the existing customers in it as it does not mean huge business inflows for us," adds the bank executive.
If the house you are buying is still under construction, you will be able to add a co-owner only if the builder agrees. "Most developers restrict or prohibit transfers before you take possession of the house, and if they do allow, you will have to pay steep transfer charges. However, the advantage of taking this step is that if the ownership is transferred before the sale deed is drawn, you will not have to pay an additional stamp duty or registration charge," says Naushad Panjwani, executive director, Knight Frank India.
Rights and taxation
According to the Transfer of Property Act, a co-owner has a proprietary right to the entire property. So, any transaction needs to be done with the consent of all the owners, unless specifically mentioned in the agreement. The co-owner has full rights to decide whether to reside in it, give it out on rent, or even sell it.
Whenever the house is sold, the co-owners will have to pay tax on the capital gains earned by them. In the case of the second owner, the capital gains will be computed on the basis of the market value of the house as on the date that it was sold or gifted to him.
Banks generally don't charge any money to just add a co-borrower to the loan. However, if you want to extend this and add the person as a co-owner, the lender might be more selective about letting you do so. The bank or financial institution from which you have taken the loan will probably ask the co-owner to become a co-borrower as well and then it will ascertain his/her credit worthiness. The mortgage deed will have to be redrawn and the new owner will have to pay additional stamp duty and registration charge along with the bank's processing fee.
A senior general manager with the Bank of Indiaexplains that they consult with their legal team before agreeing to add a co-owner to the property. "If it increases the eligibility criteria of the couple and gives them an opportunity to opt for a top-up loan, we certainly consider such a case," he explains.
According to the official, the bank levies all the charges that are levied in case of a new application. "We impose all the necessary charges, including the search and valuation, legal, administrative and processing fees, on the customer," he adds.
However, a bank will not let you add a co-owner if you only want to take advantage of a new scheme floated by it. "For instance, if there is a scheme under which we are offering a waiver of certain charges, we don't include the existing customers in it as it does not mean huge business inflows for us," adds the bank executive.
If the house you are buying is still under construction, you will be able to add a co-owner only if the builder agrees. "Most developers restrict or prohibit transfers before you take possession of the house, and if they do allow, you will have to pay steep transfer charges. However, the advantage of taking this step is that if the ownership is transferred before the sale deed is drawn, you will not have to pay an additional stamp duty or registration charge," says Naushad Panjwani, executive director, Knight Frank India.
Rights and taxation
According to the Transfer of Property Act, a co-owner has a proprietary right to the entire property. So, any transaction needs to be done with the consent of all the owners, unless specifically mentioned in the agreement. The co-owner has full rights to decide whether to reside in it, give it out on rent, or even sell it.
Whenever the house is sold, the co-owners will have to pay tax on the capital gains earned by them. In the case of the second owner, the capital gains will be computed on the basis of the market value of the house as on the date that it was sold or gifted to him.
Budget 2012: MPs want IT exemption limit hiked to Rs 5 lakh
NEW DELHI: Ahead of the Budget, some members of a Parliamentary panel scrutinising the Direct Taxes Code (DTC) Bill today pressed for raising the income tax exemption limit to Rs 5 lakh per annum.
The Standing Committee on Finance, which met under the chairmanship of senior BJP leaderYashwant Sinha, has decided to finalise its report by March 2, enabling Parliament to consider the ambitious reforms in direct tax regime.
"The Committee will meet again on February 24 and finalise the report on the DTC Bill by March 2," sources said.
Some members, they said, "wanted the IT exemption limit to be increased to Rs 5 lakh per annum in view of inflation and erosion in purchasing power of rupee."
The government is hoping for approval of the DTC Bill by Parliament in the next fiscal. Pending Parliamentary nod, the government may include some of its provisions of the Bill in the budget to be presented on March 16.
The Committee, in its draft report, has suggested that the income tax exemption threshold be enhanced to Rs 3 lakh per annum from Rs 1.8 lakh at present. The Bill proposes the limit of Rs 2 lakh and also provides for revising the tax slabs for all the three categories.
Currently, income of Rs 1.80-5 lakh attracts 10 per cent tax, Rs 5-8 lakh 20 per cent and above Rs 8 lakh, 30 per cent.
It had also proposed retaining the corporate tax rate at the existing 30 per cent.
The DTC, which will replace the Income Tax Act, 1961, was referred to the Standing Committee for scrutiny after introduction in Lok Sabha on August 2, 2010.
The Standing Committee on Finance, which met under the chairmanship of senior BJP leaderYashwant Sinha, has decided to finalise its report by March 2, enabling Parliament to consider the ambitious reforms in direct tax regime.
"The Committee will meet again on February 24 and finalise the report on the DTC Bill by March 2," sources said.
Some members, they said, "wanted the IT exemption limit to be increased to Rs 5 lakh per annum in view of inflation and erosion in purchasing power of rupee."
The government is hoping for approval of the DTC Bill by Parliament in the next fiscal. Pending Parliamentary nod, the government may include some of its provisions of the Bill in the budget to be presented on March 16.
The Committee, in its draft report, has suggested that the income tax exemption threshold be enhanced to Rs 3 lakh per annum from Rs 1.8 lakh at present. The Bill proposes the limit of Rs 2 lakh and also provides for revising the tax slabs for all the three categories.
Currently, income of Rs 1.80-5 lakh attracts 10 per cent tax, Rs 5-8 lakh 20 per cent and above Rs 8 lakh, 30 per cent.
It had also proposed retaining the corporate tax rate at the existing 30 per cent.
The DTC, which will replace the Income Tax Act, 1961, was referred to the Standing Committee for scrutiny after introduction in Lok Sabha on August 2, 2010.
Subscribe to:
Posts (Atom)